30 April 2010

The Nanny State?

I have a simple car but it has a few things which really annoy me. The worst is that if I park the car on a summers day, I like to have the door open (if it is in a safe place to do that of course). The problem is the car beeps constantly to let me to know the key is in the ignition. I can't turn the beep off so the key has to be removed. Fine as this stops me accidentally locking my keys inside. But if I want to listen to the audio system, the key must be engaged. So I cannot listen to music with any door open on the car. If the beep would stop after ten beeps, I would be happy. But this beep goes on until either the polar caps melt or the battery runs out, whichever comes first. I would rather not have the beep as I lock the car remotely anyway and I must have the key in hand to do so. They are trying to nanny me and I don't like it.

So where next. There are many safety features that are and will be very sensible. However, I can't help but think that one day, we will get into a car, tell it in some way where we are going, and the rest will be auto pilot. The rationale to this will be that it will be safer, have traffic flowing better and there will be no need for drivers licenses. We will arrive at the end of a long journey relaxed. Ahhhh. I must say the end of road hogs, of which NZ had an a disproportionate number, has appeal too. I really see a time of the driverless car. The road toll, which amounts to millions around the world each year, will be virtually eliminated. It is hard not to see that as a plus. Still, there is something rewarding about driving a car. I would rather see more put into driver education, done over the life of the driver, not just when you get a licence.

The bottom line: The nanny state is here to look after us, so relax.

25 April 2010

Car Styling

I am a believer that a car should be more than just well engineered, though that is very important. It also needs to have a 'wow' factor, or at least be pleasing on the eye.

I feel that Italian styling with cars is good. From Ferrari to Alfa, they look right and thankfully are better engineered than they used to be.

I also like the style of what is left of the British car industry; Aston Martin, Land Rover and Jaguars are examples of what I'm talking about.

The French can be stylish but they don't set the pace as they used to in the style department.

The USA is a mixed bag, from the 'box on wheels' Jeeps, to the iconic Corvettes and Mustangs. Japanese tastes are far too conservative and it shows in their cars. In a word boring.

The Germans are obsessed with engineering and style is secondary. I quite like where the Volkswagen brand is heading, whereas the German premium brands are losing their way. The styling direction of Daimler is shown below in this concept. Does it push the right buttons for you? Is this the shape to enhance Mercedes Benz cars?

The bottom line: Taste in styling is subjective, but this to my eyes is getting into the ugly zone.

Car Sales 2009: Romania

Romania had a poor year in 2009 for car sales. With double digit increases throughout this century up until 2007 boded well for the future economic success of the country. Unfortunately, the world hit an economic crisis and Romania wasn't spared. Sales fell 14% in 2008 and slumped by 52% in 2009, going from 270,000 to 130,000. Dacia is the local brand in the country, owned by Renault. They make their own unique models and are starting to do well internationally. In fact in many markets, Dacias are sold as Renaults, whereas in other places they are a sold under their own brand name. Of course, the sales drop within Romania has cost the brand sales like everyone else. The top finishers in 2009 were sales/ market share/ decrease on 2008:

1 Dacia 39,000 30% -49%
2 Hyundai 10,800 8.3% -17%
3 VW 9,400 7.3% -54%
4 Renault 8,900 6.9% -54%
5 Skoda 8,900 6.8% -62%
6 Ford 8,800 6.7% _49%
7 Kia 6,100 4.7% -28%
8 GM Opel 5,800 4.5% -65%
9 Fiat 5,000 3.8% -51%
10 Peugeot 3,900 3% -61%

13 Suzuki 2,400 1.9% +70%

So apart from the Korean brands and Suzuki, a depressing result all around. I want to say 2010 is on a rebound but sales for the Jan-Mar 2010 period are down a massive 70%! Ouch. I believe there are bargains to be had if you are looking to invest in a car dealership in Romania.

The bottom line: You would think things can only get better from here.

21 April 2010

UK Car Market: Local Vs Import

In 2001, only 24% of cars sold in the UK were locally made. I thought that was bad. However, with the demise of virtually all local brands, the Japanese brands that set up factories in the UK could have replaced them in the market. Unfortunately, they either failed to register as locally made, or were dismissed as not actually adding anything to the economy. The latter opinion, while popular among some, would have to be right up there with the logic of the flat earth society.

The trend toward imported cars has continued. While some of these imported cars do have UK made engines, that represents something like 10% added value only. In 2002, local cars made up 23%, then 20%, 18%, 17%, 14.5%, 14%, 13.5% and in 2009 just under 11%. The last figure represents just over 200,000 units of 2 million. It's hard to say if this will ever be reversed, although I'm picking a small increase in locally made cars for 2010.

It's a lesson that if you don't take care of what you have, it can be lost and not ever retrieved. The Austins, Morris', Triumphs, Rovers etc have gone. A shame but they were not looked after by the management that was supposed to protect and nurture them.

The bottom line: It seems the import has won the battle of Britain.

Pictures: Top, the past of UK car making, the Rover 2000 and above the future, the Nissan Qashqai.

PS. Data for this blog sourced from the SMMT, proud supporters of UK car manufacturing.

UK Engine Production: 2009

If things were grim on the UK car producing front, it was better for British engine making. Nearly 2.1 million engines came out of plants in England and Wales. That's right, three quarters of a million engines were made in the Principality (Wales). In 2008, it was 2.8 million (-26%), but it could have been worse. So who made them, how many, the UK percentage and how down on last year?

Ford 1,430,000 (68.5%) -18%
BMW 362,000 (17.3%) -2%
Nissan 109,000 (5.2%) -4%
Toyota 89,000 (4.3%) -70%
Honda 60,000 (2.9%) -71%
Cummins 34,000 (1.6%) -58%

Ford made 750,000 in Dagenham, London and 680,000 at Bridgend, Wales. You would think Toyota and Honda will do better in 2010.

The bottom line: 2010 should be better for engine making in the UK.

PS. Picture Ford Dagenham Engine Plant

Italian Car Production: 2009

Italian car manufacturing is not very big. It didn't attract investment from other countries due to restrictive labour laws. So Fiat and the brands that come under its umbrella are basically it. The Fiat brand made 649,000 cars in 2008, and it went up slightly to 661,000 (+2%) in 2009. European incentives to buy small cars helped Italy greatly, as that is what they mainly make. For a brand breakdown of 2009 compared with 2008:

Fiat 430,000 420,000 +2%
Lancia 112,000 109,000 +3%
Alfa Romeo 104,000 103,000 +1%
Ferrari 6,200 6,700 -8%
Maserati 4,000 9,300 -57%

Unfortunately, 2010 is starting to look grim for Fiat production. Scrappage schemes are all but over and reality now bites for small car makers. This is why I was against such schemes in the first place. It was putting off the inevitable. Makers of larger vehicles have gone through the worst and are now on the up. For example Land Rover is having a very good 2010 after much pain in '09.

The bottom line: Expect 2010 to be much lower for Italian car production.

18 April 2010

Engine Downsizing

Car engines have been getting larger and larger, trying to have that little more power than the competing make. Fuel was cheap so it didn't matter. Now fuel is getting dearer and makers struggle with keeping exhaust emissions down. In some European nations, how much pollution a car creates impacts on the cost of the vehicle with various punitive measures meted out.

Selling cars is competitive so car makers are nothing if not inventive. Car engines are getting smaller, however buyers still want the power they are used to so a new trend in engines is emerging. Putting one or even two turbos on a small engine is one way to keep up the power and reduce fuel use.

Other areas of improvement include smarter direct injection of fuel. Tyre technologies, energy released when breaking is sent to the alternator, some cylinders shutting down when they are not required, weight reductions, improved aerodynamics and many more features achieve improvements. I personally think cars in most cases have more power than they need already. Obviously I don't have to compensate like many men have to.

The bottom line: Expect cars in the future to have smaller engines, yet similar or improved power.

PS: Engine pictured is VW's 1.4 TSI unit, overall winner at the 2009 International Engine of the Year Awards.

14 April 2010

The Premuim Sector Shift Of Power

When one has thought about premium brands of cars, Mercedes and BMW came to mind. In North America, Lexus maybe also. But for the world at large, those two brands were the big players. However, backed by the VW Group, Audi has been steadily closing the gap.

Now in the first quarter of 2010, Audi is making its move to be number one premium brand. For the first time ever, Audi passed Mercedes Benz and did it comfortably. Merc sold 248,500, Audi 264,100, while BMW sold 265,800, a mere 1,700 lead. Had it not been for the new niche BMW has just entered with the X1 (X1 sales 19,700), it would have been relegated to second and Audi top by some margin.

Mercedes realised its needs help to reduce costs and keep up in the race for sales a while back. It tried an unsuccessful union with Chrysler, and now it is tentatively getting into an alliance with Renault-Nissan. BMW some years ago bought the Rover Group for the same reason and quickly turned profitable Rover into a loss maker. It retreated with the MINI brand and has done well with that since*. However, unless it can find an ally to share the cost of operating in a cash hungry business, I would suspect it has no hope of fending off Audi.

The benefits to Audi of sharing so much within the VW Group makes its becoming the sales leader of the premium sector a fait accompli. BMW will no doubt have other ideas on that one. BMW may get closer with France's PSA, but that won't be enough, in my opinion, to stop the VW owned brand brushing it aside.

The bottom line: Audi will become the top premium brand sooner or later.

*Sales figures quoted in this article for BMW exclude the MINI brand.

10 April 2010

Tata's Shrewd Buy

When Tata bought Jaguar/Land Rover from Ford Motor Company for US$2 billion, many thought it was a poor decision. Ford rarely made money from either, especially Jaguar, which it owned from 1989.
At the time Mr Tata said he would be patient in his expectations and was in it for the long term. Well, he hasn't waited long as both brands have quickly moved into profitability. By the last quarter of 2009, sales were rebounding and the first quarter of 2010 Land Rovers sales in particular have been outstanding. This from a brand that sells medium to large SUVs.

For the first three months of 2010, Land Rover sales in selected markets are as follows: UK 15,000 +63%, USA 6,700 +15%, China 5,200 +190%, RSA 1,450 +50%, Spain 1,400 + 60%, Brazil 1,100 +50%, Korea 250 +100%, NZ 140 +200% and Poland 100 +330%.
Jaguar has been selling only two models and its sales have been amazing while it waits for the XJ to reach the market. A few markets it has done well in for the first quarter: China 600 +70%, Australia 275 +50%, Korea 160 +95% and Portugal 70 +75%.

So why the difference between Ford's and Tata's success with JLR. Well, Ford sold after it had done much to improve the brands so didn't gain the fruits of its efforts. Ford was in a financial mess at the time and had little choice. But the sale to Tata will benefit JLR in future because Ford always tended to be a hands on owner - usually not getting it right with Jaguar - to Tata's viewing JLR as a separate organisation within a conglomerate. This will allow JLR to make decisions and move quickly with them, something Ford ownership never allowed.
JLRs future will be about getting CO2 emissions and fuel consumption down. They are working hard at it but are behind on where they should be. Tatas's ownership should allow them the flexibility to make such improvements quickly.
Yes, some questioned the purchase but no one is thinking that now.

The bottom line: Tata gains credibility with JLR and JLR gains autonomy. A win win situation it seems.

09 April 2010

Ugly Porsche

What are Porsche thinking? Do they have the ugliest range of cars in the world? I'm thinking so. Look below to see:

In the top two pictures, the Porsche Panamera is very dull up against the Aston Martin Rapide.

Then the Porsche Cayenne is head to head with the Range Rover Sport. Again no contest.

Finally the 911 is totally out shone by the Jaguar XKR. The 911 looked very good...in the 1940s, but not today.

Porsche isn't interested in how their cars look, that is obvious. The engineering guys are in control and the stylists (term used loosely) have no say. I personally want a good car to look good too. The three on the right tick all the 'yes' boxes. The Porsches tick the ugly box. They are also all way over priced. The only thing going for them is that they are well engineered. But so is the opposition. So why pay too much for well made ugly cars when the competition offers such beauty and better value? I certainly wouldn't want to buy a Porsche.

The bottom line: Porsche can do better and should.

01 April 2010

On Your Bike

Recently I was watching cars drive past me, most with one occupant and the driver exuding an air of anxiety. I wondered about what they were out doing. For our family (two adults), we make do with one car. We work secularly, do volunteer work and relax together. We do have one day where our jobs take us in different directions, so I cycle. It's about a 40 minute round trip, but it saves the expense and environmental impact of a second vehicle.

I also take the bike to town (a twenty minute round trip) to run errands and do smaller shopping purchases. It is good for my health, my soul, the environment and the bank balance. It's a win, win, win, win situation. But how many of those people who I watched drive by could have made do with two wheel transport? Have we become so stressed, so indolent that this option doesn't even make it onto the radar?

I love my bike but it is nothing fancy and it has passed ten years of use. I ride it often during the week, sometimes along the moderate cycle tracks we have in this town just for the health and well being of it. I would recommend getting one and using it. You could check for advertisements for someone selling one they do not want anymore. If you already have a bike collecting dust and deteriorating somewhere, get it up to scratch and get using it. So on your bike.

The bottom line: It's a very efficient form of transport that the west has almost forgotten about as adult transport.